I was reading my latest issue of the Motley Fool Stock Advisor when I saw them use a term I’ve always found entertaining – ten-bagger. The newsletter itself was talking about how Netflix has become a ten-bagger since David Gardner’s recommendation in 2004. The term ten-bagger refers to a stock that is worth 10 times more than its original purchase price, or an appreciation of 900% over the holding period.

The origins of the term are from One Up On Wall Street by Peter Lynch and it’s most often cited by long and hold investors because it’s so hard to do. Before a stock is worth 900% more than what you paid for it, it has to be worth 200% and 300% and 500%. All the while you have to stick with it, before it’ll reach 900%. And when it does become a ten-bagger, that doesn’t mean you should sell it, it’s as meaningless a benchmark as any other (the market has no idea where you purchased it).

The closest I’ve ever come is a hair over 200% on shares of Apple stock I purchased early last year when Steve Jobs took medical leave in early 2009.

Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

16 Responses to “What is a Ten-Bagger?”

I would have, but I was lazy and chose not to deal with transferring money. When the market was really low in March 2009, I was thinking of buying a stock that was $0.23. Right now it’s at about $1.86, but was up to over $3 at one point.

i won the stock market game we played in economics in high school with kmart. when they went bankrupt their stock fell to something like 15-25 cents a share and i sold 10,000 fake shares at around $1.20. huge fake dividends haha

I bought McDonald’s stock in 2004 or 2005 (can’t remember) for about $17 per share. Its at $73 today. 3 bagger i guess is the best i’ve done. Most of the time I get greedy or scared and take my profits

@billsnider – yeah but you can only lose 100% in the worst case scenario – but you can make a lot more than 100% – even then its pretty rare for a company to go bankrupt and you lose 100%. One 10 bagger can make up for a lot of strikeouts.

Currently you have JavaScript disabled. In order to post comments, please make sure JavaScript and Cookies are enabled, and reload the page.Click here for instructions on how to enable JavaScript in your browser.